Nu Skin Case: Some Thoughts on Influencer Marketing and Misleading Claims
February 09, 2021
Global Advertising Lawyers Alliance (GALA)
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Recently, cosmetics and skin care company Nu Skin made headlines after fined AR $ 2.5 million (approximately $ 30,000) for misleading advertising. Although the sanction decision, as reported on the argentina.gov.ar platform, has not yet been published, Nu Skin Argentina allegedly violated Article 4 of Law 24.240 on consumer protection by not providing truthful, clear and detailed information about its products made available. Indeed, the company would have promised consumers “a full life and a sense of youth” and would have advertised its products under stereotypical beauty standards that deliberately confused aesthetics and health.
With this in mind, it should be noted that the ANMAT (Argentine Food and Drug Administration) Regulation No. 4980/2005 establishes the prohibition of advertising messages for over-the-counter medicinal specialties that may cause fear or anxiety, suggesting the health of a person will be affected when the product is not in use. The regulation also provides that advertising may not attribute any therapeutic, nutritional, cosmetic, diagnostic or other preventive measures or properties to the product that have not been expressly recognized or approved by the health authority. Finally, the regulations forbid advertising to indicate that a cosmetic product has therapeutic properties. This regulation also applies in many respects to medical devices.
As stated in argentina.gov.ar, the Nation’s Internal Trade Secretariat would have assumed that the company’s advertising led to the assumption that those who don’t conform to stereotypical beauty patterns may suffer from health problems and that the underuse of its products this can lead to different conditions. In addition, the specific health benefits of using the company’s products would not have been disclosed in the relevant advertisements.
It should be remembered that most of the promotion Nu Skin does in the country is done through influencers through posts or stories on social media. Just going to Instagram shows countless influencers and celebrities using and promoting Nu Skin’s so-called “little device”. Many of the influencer’s communications are spontaneous and their content is therefore very different.
The main purpose of this article is not to analyze the merits of the decision or its relevance since – as mentioned earlier – the full resolution has not yet been published. However, the case serves as an excuse to remember some of the basic principles of advertising, particularly the use of influencers as commercial content generators:
- The advertising measure of influencers is not yet specifically regulated in Argentina. There is a bill for an “Influencer Legal System” that was submitted in 2020. The bill lays down a legal framework for influencers’ digital advertising services, including an enforcement agency, administrative sanctions, and an extraterritoriality criterion.
- Currently, the general rules governing advertising for commercial communications or advertising by influencers, including Law No. 22.802 on Commercial Loyalty and Law No. 24.240 on Consumer Protection, apply.
- In 2020, the Advertising Self-Regulation Council (CONARP) published a guide on the use of influencers in commercial communication, the basic principles of which are: the accuracy and reliability of advertising messages; Transparency in the information that the influencer’s message is actually content that the brand is paying for, for which consideration has been given; and the authenticity of the influencer’s or third party testimonials or statements that appear on their platform.
- Although the current regulation does not prescribe the identification of advertisements through the use of advertisements or the like, its necessity could be derived from the application of Article 4 of the Consumer Code to the effect that the information provided to the consumer must be “clear”. truthful and detailed. “
- Brand social responsibility for businesses shouldn’t be optional. It is obvious that brands play an important role and have a significant impact on society. For this reason, it is important that they improve voice diversity in relation to their commercial communications and monitor the content they generate, especially if the brand does not directly intervene in the creation of that content.
- The claim approval protocol for traditional ads (as we know, traditional ad claims tend to go through multiple filters, including approval from marketing, regulatory, and legal teams) should be repeated with the same severity in scrutinizing claims made by influencers by the brand hired . If the brand cannot prove in traditional advertising that, for example, the use of a product “rejuvenates”, the influencer should not be able to say this in a commercial communication on Instagram either.
The lack of effective control over the content created by third parties, the lack of contracts setting out the obligations of the brand and the influencer, as well as their responsibility in the event of non-compliance, can lead to errors that not only have economic implications, but also can negatively impact the brand’s reputation. In conclusion, covert commercial communication by influencers pretending to be unrelated to the brands they are promoting and brands pretending to be unrelated to the influencers they have a material connection with no longer appears to be a legitimate alternative to be .
The content of this article is intended to provide general guidance on the subject. A professional should be obtained about your particular circumstances.
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